The Importance of Simplifying Your Life

I recently had a conversation with a dear friend of mine since grade school and his beautiful wife. They had a bunch of small bills that they were thinking about paying off but were not sure about taking money out of their investment account. This is a common question we get, typically regarding paying off a home.

There is a benefit of keeping money in an investment account versus paying off a low interest rate debt, like a mortgage under 3%. However, and this must be stressed, there is also a benefit of paying these debts.

In the case of my friends, the benefit of simplifying their life and ridding themselves of many small bills may be even more valuable than the dollars they may lose in opportunity cost going forward. In their case, it was more beneficial.

Below are some suggestions to simplify your life, mainly focused on wealth management. First though, let’s discuss why it is important to simplify your life.

In a 2000 article published by National Library of Medicine, research shows problems with clutter have been associated with stress and life dissatisfaction. According to research from an article published by the Mayo Clinic named “Chronic Stress Puts Your Health at Risk,” chronic stress may lead to heart diseases and strokes. However, it is not just these life-threatening reasons. Stress also may lead to poor sleeping and eating habits, which both are bad for your health. Let’s face it, stress is bad.

Thus, here are my recommendations regarding how to simplify our lives and reduce stress:

• If possible, reduce the number of accounts you have. If you have multiple accounts at several different banks or custodians, it is imperative you monitor them often. First and foremost, to ensure no identity theft. Second, to ensure your money is working for you and not the bank or custodian. The more accounts you have, the more time this takes. It is my experience after many years of helping people with their wealth, the more accounts the less likely this is being accomplished. If possible, it will really simplify your life if you consolidate your accounts. An interesting side note, reconciling accounts seems to be a dying practice. I wonder if clutter in our lives is leading to this.
• If you have too many small debts/bills, pay them off so you can use that time elsewhere. I know many of you might pay online and maybe having a lot of small bills isn’t time consuming but for others it can be. The extra money you make from not paying off small bills may not be worth the stress and clutter they bring to your life.
• Rid yourself of paperwork. If you feel comfortable with the technology, go paperless and get your statements electronically sent to you. One of the biggest negatives I hear from clients regarding custodians is the amount of mail they receive daily. Some of this we cannot control, most of it we can. Call us to help you reduce your paperwork.
• Financial goals are very important. Too many goals set yourself up for failure, which leads to stress and negative thoughts. Focus on no more than two financial goals at any point in time. Maybe it is to save a certain amount each month, college education planning or to reduce spending. Just be careful having too many.

Life right now can be challenging enough without adding unnecessary financial clutter. Simplifying your life most likely will lead to a healthier and happier life. At Virtus Wealth Management, we believe that helping our clients become less stressed isn’t as much about financial performance but more importantly security and peace of mind.

Please call Virtus Wealth Management at 817-717-3812 if we can help you simplify your financial life.